Imperial Loses U.K. Court Appeal Over Scotland Display Ban

Dec. 12 (Bloomberg) -- Imperial Tobacco Group Plc, the
maker of West and Davidoff cigarettes, lost a U.K. Supreme Court
appeal over a Scottish law banning vending-machine sales and the
display of tobacco products in stores.

Britain’s highest court rejected today Imperial’s claim
that the Scottish Parliament, a “devolved” national body
created in 1998, doesn’t have the authority to enact such bans.
The new rules don’t involve the type of consumer protection or
product safety matters that can only be handled by the U.K.
Parliament, the court said in a unanimous ruling.

“We know that reducing the number of people that smoke
will have wide benefits for Scotland’s health and these bans
will play a crucial role in preventing young people from taking
up smoking,” Michael Matheson, Scotland’s minister for public
health, said in an e-mailed statement about the ruling.

Since 2007, dozens of countries have put in place measures
to limit smoking, which killed almost 6 million people last
year, according to the American Cancer Society. One of the
toughest such laws took effect Dec. 1 in Australia, where
cigarettes must now be sold in dark brown packets, with no
symbols or images and the same font for all brands.

The purpose of the bans in Scotland is “to discourage or
eliminate sales of tobacco products, not to regulate how any
sales are to be conducted,” the London-based court said in a
summary of the opinion.

Legal Fees

Scotland passed the law in 2010, triggering the lawsuit and
a lower-court ruling against Imperial earlier this year. Lawyers
for the Edinburgh-based government will now seek to recover its
legal fees in the case, Matheson said.

“We’re disappointed with today’s judgment, as we believe
our legal argument was strong,” Simon Evans, a spokesman for
Bristol, England-based Imperial, said in a phone call. “We’ll
now await the publication of the Scottish display ban
regulations and consider our options.”

The failed appeal by Imperial is the first case in which
provisions of a Scottish law have been challenged on the ground
that they overlap with issues reserved for the more-powerful
U.K. Parliament, the court said.